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A Win-Win-Win Tariff-Tax Reform under Imperfect Competition

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  • Kenji Fujiwara

    () (School of Economics, Kwansei Gakuin University)

Abstract

Taking into account non-constant marginal costs, this paper considers the e ects of a tari cut combined with a consumption tax increase on welfare, government revenue, and market access. We show that welfare, government revenue, and market access can all improve with this policy reform under decreasing marginal costs. This result may provide a theoretical rationale for the above policy reform, which is guided by the IMF and the World Bank.

Suggested Citation

  • Kenji Fujiwara, 2012. "A Win-Win-Win Tariff-Tax Reform under Imperfect Competition," Discussion Paper Series 83, School of Economics, Kwansei Gakuin University, revised Feb 2012.
  • Handle: RePEc:kgu:wpaper:83
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    References listed on IDEAS

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    1. Jota Ishikawa & Hiroshi Mukunoki, 2008. "Effects of Multilateral Trade Liberalization on Prices," Review of International Economics, Wiley Blackwell, vol. 16(1), pages 37-44, February.
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    4. Zhang, Anming & Zhang, Yimin, 1998. "An analysis of import protection as export promotion under economies of scale," Japan and the World Economy, Elsevier, vol. 10(2), pages 199-219, April.
    5. Joshua Aizenman & Yothin Jinjarak, 2009. "Globalisation and Developing Countries - a Shrinking Tax Base?," Journal of Development Studies, Taylor & Francis Journals, vol. 45(5), pages 653-671.
    6. Takumi Naito & Kenzo Abe, 2008. "Welfare- and Revenue-Enhancing Tariff and Tax Reform under Imperfect Competition," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 10(6), pages 1085-1094, December.
    7. Dick, Andrew R, 1994. "Does Import Protection Act as Export Promotion? Evidence from the United States," Oxford Economic Papers, Oxford University Press, vol. 46(1), pages 83-101, January.
    8. Jota Ishikawa & Tomohiro Kuroda, 2007. "How Effective are Emissions Taxes in an Open Economy?," Review of Development Economics, Wiley Blackwell, vol. 11(2), pages 359-368, May.
    9. Hatzipanayotou, Panos & Michael, Michael S. & Miller, Stephen M., 1994. "Win-win indirect tax reform : A modest proposal," Economics Letters, Elsevier, vol. 44(1-2), pages 147-151.
    10. Kreickemeier, Udo & Raimondos-Møller, Pascalis, 2008. "Tari[ff]-tax reforms and market access," Journal of Development Economics, Elsevier, vol. 87(1), pages 85-91, August.
    11. Baunsgaard, Thomas & Keen, Michael, 2010. "Tax revenue and (or?) trade liberalization," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 563-577, October.
    12. Bee Yan Aw & Mark J. Roberts & Daniel Yi Xu, 2008. "R&D Investments, Exporting, and the Evolution of Firm Productivity," American Economic Review, American Economic Association, vol. 98(2), pages 451-456, May.
    13. Keen, Michael & Ligthart, Jenny E., 2002. "Coordinating tariff reduction and domestic tax reform," Journal of International Economics, Elsevier, vol. 56(2), pages 489-507, March.
    14. Ishikawa, Jota, 2000. "From Segmented Markets to Integrated Markets: An Analysis of Economic Integration and Antidumping Law," Discussion Papers 2000-01, Graduate School of Economics, Hitotsubashi University.
    15. Jota Ishikawa, 2004. "From Segmented Markets to Integrated Markets: an Analysis of Economic Integration and Antidumping Legislation," Review of International Economics, Wiley Blackwell, vol. 12(4), pages 706-722, September.
    16. Baier, Scott L. & Bergstrand, Jeffrey H., 2001. "The growth of world trade: tariffs, transport costs, and income similarity," Journal of International Economics, Elsevier, vol. 53(1), pages 1-27, February.
    17. A. M. Spence, 1981. "The Learning Curve and Competition," Bell Journal of Economics, The RAND Corporation, vol. 12(1), pages 49-70, Spring.
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    Cited by:

    1. Kenji Fujiwara, 2014. "Tax Principles and Coordination of Trade and Domestic Policies Under Imperfect Competition," Australian Economic Papers, Wiley Blackwell, vol. 53(1-2), pages 29-40, June.
    2. Zou, Yuxiang & Chen, Tai-Liang, 2016. "International joint venture and welfare-improving tariff-tax reforms," International Review of Economics & Finance, Elsevier, vol. 46(C), pages 27-35.
    3. Kenji Fujiwara, 2014. "Tax Principles and Tariff-Tax Reforms under International Oligopoly," Discussion Paper Series 116, School of Economics, Kwansei Gakuin University, revised Mar 2014.

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